When onboarding an owner as well as after serving an owner we periodically evaluate whether we are actually a good fit for you as a property management company or not. It’s important that we do this in order to make sure you as a client or potential client are best served.
Here is what we look for as we partner with you to manage your property:
1) BUSINESS MINDSET – An ideal client for us would be somebody that possesses a business mindset; or at least somebody who can partially adopt this mindset. By business mindset I mean being able to cope with the inherent risks and stress that comes along with owning a business. We are aware that lots of clients don’t begin with this mindset, maybe because of the circumstances in which they obtained their property (maybe a relative left it for them or they weren’t able to sell a vacant home); but at least a partial paradigm shift must be attained if you are to own a business of any type. The property investment environment is full of things you can’t control – people breaking promises, economy changes, tax law changes- so even if we deliver peace of mind for you today, if you can’t stop worrying about what might happen tomorrow and if this affects you negatively, you might not be a good fit for this type of business. Also as part of a business mind set you need to see your rental property as an business that requires capital investment in order to grow it and keep it up.
2) AFFORD PROPERTY AND MANAGEMENT COSTS – Another characteristic that would be a good fit for us is somebody who needs property management services and can afford the expenses that come with maintaining a property. A person without any knowledge of property management and investment properties would definitely need our services. But, there are also people that, even if they have the knowledge and experience related to property management (collections, dealing with tenants, going to court, etc), still come to us looking for our services, maybe because they are professionals who lack the time to do it themselves, or maybe because it’s just comfortable for their lifestyle. It’s really important to also keep in mind that after all of the initial expenses of actually acquiring a property, certain maintenance expenses will come into play eventually. Some things need to be fixed and given regular touch-ups if you are to attract good tenants and keep the property profitable. And remember our priority will always be to give you peace of mind as an owner, but we also have families to support, so we need clients that are not only willing, but also able to pay for our services.
3) AREA – If you own a property in a C-, D or F areas we will likely not be willing to manage it. This is because for us our ability to work for you is tied in with our profitability as a company. Our largest expense is labor. We did a time study and found that low end property will have 20 times the amount of service calls and inquiries as a high end property per unit which also means our labor costs multiply by that factor as well. Considering that this is our number one expense we simply can not afford to manage properties that have 20 times expense while also likely making less income. Frankly you as a client won’t enjoy the reduced service we would have to provide to survive under those circumstances. This is one reason why offer a flat rate management fee module because we want to incentivize those people with higher end, higher rent properties to work with us.
4) YOUR SYSTEM NOT OURS – Another big N.O. for us is when a prospective client that already has a managing system in place (maybe because of their experience or other circumstances) wants to use our services but this person wants us to follow the system already in place. We have our own systems, and they are the foundation of how we are able to deliver a quality service and offer the rates we are able to offer while being profitable. We improve on these systems continuously, and having to adopt a second set of systems, on top of ours will only diminish our efficiency, and double the time we need to get things done for you. Along the same lines if you have your own maintenance we may be able to work with you but if we have issues with your maintenance we will typically have to either take it over ourselves or give you notice as a client.
5) WILLING AND ABLE TO MAINTAIN PROPERTY – I already alluded to this but if a property is not maintained it attracts bad tenants or none at all. Then the bad tenants do more damage and you find yourself in a downward spiral with your valuable investment. Come hell or high water you need to maintain your investments at a high level to see the highest return and sometimes that means acknowledging your return adjusted for maintenance might be lower than you expected in the short term.
All these items boil down to our desire to accomplish our goal as a property management company provide you with peace of mind as an owner. If a factor exists that we think might get in the way of that it’s better for both parties to not do business with each other rather than settle for less than optimal results for all parties.
A question that is commonly presented to us is whether a landlord should work with a property manager that also sells properties, or one that only specializes in property management. Here in Ohio, to become a property management company you’re required to be a real estate brokerage. Unless you’re planning on breaking the law, a property manager needs to be a licensed broker, or there at least need to be a licensed agent working under the oversight of a licensed broker and in the name of a licensed broker.
At Realty Trust Services, LLC, we have both licensed and unlicensed individuals. We have people that exclusively do administrative work that don’t need a license. Still, our goal is to get as many people licensed as possible; this goes in hand with our belief that the more licensed and fully prepared people we have in the company, the more it elevates the company as a whole – as well as the level of service and professionalism we are able to provide.
There’s a world of difference between a brokerage that takes care of property management and one that sells properties. The amount of administrative work, taking care of maintenance, leases, tenants… this is a huge burden that falls on the company that focuses on property management, and it requires a long-term customer service-oriented mindset, in contrast to a sale-by-sale oriented mindset that focuses mainly on completing a transaction that is usually associated with a sales focused brokerage.
With all this information on the table, we would normally suggest that a property manager specialized in your needs (either sales or management) is what you should be aiming for. Instead of one that try to take care of both tasks equally. Nevertheless, at Realty Trust Services, LLC we do have members of our team that are specialized in property sales, with years of experience under their sleeve.
In the end it’s your choice when it comes to which type of property manager you want, and it will probably depend on your specific needs as well, but we sure hope this information is useful at the time you make that decision.
A property management company is like a clockwork machine. If a gear or a cogwheel malfunction or become damaged, the whole system is affected on different levels. So, continuous maintenance is required. I’d like to talk briefly about one of the tools we’ve implemented in order to maintain and improve our quality of service, as well as boost our efficiency as a whole.
We call this self-improvement system the Lean Process Spreadsheet. And it is what it sounds like, it’s a huge spreadsheet, filled with a list of all of the issues related to bad service, errors or things that are just not working. The team has access to this spreadsheet, and they can add details pertaining the things that need improvement, follow up, and full fixes for them. In a similar way, once a solution for a problem is offered, the team is able to offer feedback on this, make additional adjustments or simply give a kudos to whoever fixed the problem. We based this method off a book we read, “2 Second Lean”, and we’ve found it very useful and efficient for scoping our set of processes and finding small things that need improvement.
This is just one way of maintaining a good level of service to our clients, and keep ourselves as productive as possible, but we believe that both in and out of work it’s always important to take a look at the big picture: whenever you fix or improve something -no matter how small or insignificant you might think it is, it will always find a way to somehow improve something larger than itself in the long run.
So, remember… little things matter.
Usually when we think about landlord and tenant rights, we think about how the law seems a little bit skewed towards tenants over landlords. This turns out to be especially true when speaking about giving tenants the benefit of doubt, and at times even extra rights outside what is outlined in the law, by a judge in certain situations. But where exactly do landlords stand in all of this? Let’s talk a little bit about the most important rights landlords possess at the time of being in a lease agreement with a tenant.
1.- You can ask for as much as you want.
As a landlord, you are entitled to ask for as much money for your property as you want. This is something completely permitted by the law, and you can go as low or high as you desire. However, it’s not wise to go way too high or way too low – we will provide you with advice in regard to this, usually leaning to asking for more at the beginning, and then work it out with the tenant from that. As well as paying mind to market feedback in order to help you decide on a good starting price. Remember you CAN ASK for as much as you want, but you CAN’T FORCE anyone to pay as much as you want. So, sometimes it boils down to negotiating in good terms.
2.-You can set your own terms for the lease agreement
When entering into a lease agreement with a tenant, you have the right to set your own terms for the use of your property AS LONG AS they don’t enter into conflict with what is stipulated by the law. It’s also really important for you not to violate any of the anti-discrimination statutes that the law stablishes (which are ever expanding in different ways from state to state). One way to avoid falling into this when evaluating for possible tenants is to keep your focus on non-subjective aspects, and making your case from them, such as credit history, when trying to filter out potential tenants that have a heavy criminal record for example. You also need to keep in mind that the type of tenants your property will bring in will definitely depend on its level of attractiveness. When helping you find a tenant, we have a very specific screening process that we follow, designed to take all of this into consideration so we can help you find the best option.
3.- You can evict tenants for non-payment of rent and sometimes non-money related situations
The law states that if a tenant does not pay rent, he/she can be subject to eviction by their landlord. It is really important to pay mind to other types of payment besides the official rent amount when considering this option. For example, utility bills can be considered as a form of rent. If tenants are obligated to pay for these according to the lease agreement, their non-payment can be used as cause for eviction. This holds up even if the lease contract has been renewed or still has a longer period of time remaining before it ends. In our case, one of our lease clauses specifically states that non-payment of utilities is considered non-payment of rent and this can be cause of eviction if neglected.
At the same time, if the tenant enters into a violation that materially affects health and safety, you must give the tenant a 30-day window of time along with a notice, to resolve this issue. After this time has passed you can file for the tenant’s eviction if the tenant has not resolved the violation, even if they have been paying rent on time.
4.- You have the right to access the property after a 24-hour notice.
As long as you provide your tenant with a 24-hour written notice, you can access the property for inspection or any other purpose that you as a landlord deem reasonable. This can be made in form of the postal service, or even e-mail. We recommend that along with the written notice, a call is placed in order to let the tenant know a notice has been sent, this way it’s impossible for them to claim to have missed reading the e-mail or the document in paper. It’s important as a landlord though, to avoid entering in any behaviour that could be considered intimidation – as this is not permitted by the law. This becomes even more important for delicate situations in which the relations with the tenant have already deteriorated for other reasons or when an eviction process has been set in place and there is tension between both parties.
You can also access the property without notice if you believe as a landlord that an emergency-type of situation exists (a gas or water leak), and proof needs to be presented in relation to this emergency, in order for it not to be a violation.
5.- You have the right to get your property back in the state you delivered it to the tenant
This pretty much holds up for every aspect of the property EXCEPT for what we know as “ordinary wear and tear”. We will speak more thoroughly about this aspect on a different post, but it’s basically really unclearly defined by the law. In order to counter this ambiguity, we have a very detailed process in which we take photos and videos; then we present potential percentage values of responsibility for both tenant and landlord, and we keep these open for negotiation – usually starting high and leaning towards the landlord’s favor and negotiating from there while making value judgements.
Our aim is to keep this out of court, but if you do wish to take it there, it’s important to consider that if your claim as a landlord doesn’t hold up and you lose, you will end up paying double the value of the tenant’s security deposit -hence why we try to negotiate out of court and try to keep it reasonable for both parties.
6.- Other rights
Just by owning the property, you’re pretty much entitled to a whole bundle of other rights, and you transfer some of these to the tenant, when entering into a lease agreement. For example, as a landlord, you never transfer your rights to your property’s title and deed through the agreement. The only thing you transfer from yourself to the tenant is the right of access for the period to the lease. You keep this right to a certain extent, but as we mentioned before, there are limitations.
This is just one example of those additional rights, and we consider that it’s important for you to be familiar with at least the most important ones, but if you’d like to inform yourself on the details on the rest we offer you a link to the document “Tenant/Landlord Rights and Obligations”, this is a pamphlet provided by the Ohio Bar Association. The link is below.
Many people that want to begin investing in properties have a very common doubt right off the bat – Should I be registering my Cleveland property with the county and city? And how? This question is pretty understandable, since some new owners are not from Ohio, and some are actually trying to get into the game for the first time, so it’s our job to help you understand how the system works and what is the most convenient path for you.
The short answer is yes, you should register your property. It gets a little more complicated than that though. But let’s take it one step at a time. First, let’s refer to county level. You should definitely register your property with the county. It’s actually a misdemeanor if you don’t. It’s a really easy process, you only need to fill out a form and turn it in, and it’s free. We usually do this for our clients right away, even if they don’t ask us to do it, it’s pretty standard.
Municipality level is different. We take care of business in around 30 different municipalities, and around half of those require registration. Out of those, the cost to register a property varies a lot, ranging from $30 to $325. Then, the enforcement of this registration fee is different as well for each municipality; for example, some of them just make it work with the people that actually register, not trying to enforce it at all; some of them tell you that they will enforce it if you don’t register, but they don’t really have a staff to go after you. So basically, the cost of not doing it varies a lot depending on the municipality. Either way, we always recommend to comply with the law and register no matter which municipality your property is in, it’s the good thing to do, and you’re being a good citizen (regardless of its constitutionality).
Here are a few examples where registration might not be advisable:
The first example would be a situation in which you have just acquired a property, and it’s not registered; or maybe you have owned the property for a long time but never registered it. In the case that they never went after you for not registering check with counsel but it might not be in your best interest to register because: 1) They probably won’t go after you if they haven’t done it before; 2) Even if they caught you, the punitive fee that you would be incurring wouldn’t be much different than what it would be if you turned yourself in for not registering in the past. This type of situation means not registering will may place you in a better situation than trying to comply and actually getting you into trouble.
The second example is related to rental registration. In certain municipalities, in order to register your property for rental, they will freeze your ability to actually lease the property for about 15 days or so until it goes through. This means you’d be losing those days’ worth of rent. Renting the property within that period of time, would incur a violation fee which could be a minor amount in comparison to the extra rent. In this case you might choose to go ahead and rent your property and violation fee.
Whether you should register your property depends entirely on the specific context and your own comfort level however with our clients we always confirm registration by default and register your properties if they are not registered already with the appropriate municipalities.
After years of experience in the industry I have learned that it’s a really common practice for many real estate agents to not only mis-value properties during their first encounter with the owner, but also declare a fixed price for it, in hopes of trying to get your business. This goes for both rental price evaluation and sales price evaluation. You would think that, since they are professionals, they probably know about this and have the expertise needed to place a price on your home or apartment with one look. Well you would be wrong.
One very important thing to remember is that value is not a synonym of price. In general terms, the word price represents the amount of money that is asked for in order to purchase a certain something. Pretty basic right? That’s when value comes in. Value represents the actual benefit you are gaining by paying a price at the time you make a purchase. Value is that extra space you would love to have in your bedroom for a triple dresser. Or those extra square feet you need in your backyard for the vegetable garden you want to grow. Or a good view of the beach from the second floor.
And this is why stating that your property is worth a fixed amount and can only go for a certain price is plain wrong. It is wrong because even when an expert is able to assess the approximate worth of a property based its characteristics and recent history, a whole set of additional circumstances go along with that into actually defining the end value of the same property for individual potential buyers.
Maybe there’s a very specific circumstance in relation to the neighborhood surrounding the property that will give one buyer a less attractive standpoint in regards to the value of the property while at the same time, another person will actually offer an additional premium due to the fact that its really close to their workplace. In the second case, as this happens, and this new offer appears due to a single need met by this specific property, the market value begins to vary. This is basic supply and demand going into action.
For this same reason, when stating a property’s potential worth, it’s common practice to use ranges when speaking about actual pricing. This way agents take into account a variation of value that a set of different additional circumstances offer, as well as other changes in market behaviour that could very well affect the value of the property at any given time.
So, if you get to meet a new agent and he/she instantly states a fixed pricing for your property, always remember – they are either lying to you, or they have a crystal ball.
This is a question I hear a lot. People want to know if they should manage their rental properties themselves or hire a property manager. In order to answer that question, I have a couple questions for you.
Do you have real estate experience and can you handle high stress situations? Managing rental properties is a stressful job. Are you the kind of person that can stay calm and level-headed in a stressful situation? Can you manage emergencies calmly? Can you keep your cool when someone is trying your patience? These are some of the attributes you need to deal with tenants on a day-to-day basis.
Tenants bring drama and have ways of attempting to control the situation. They may call in the middle of the night or make constant demands. They may try to guilt you into accepting their excuses for not paying rent or for making concessions you wouldn’t normally agree to. Can you deal with these emotions? A manager will insulate you from possible mental and emotional abuse.
Having a manager helps with these emotions by dealing with the tenants directly. Managers create a buffer between you and the chaos. However, there are some emotions a manager can not help alleviate.
Can you handle the emotions that come with risk and property ownership? A manager can help deal with the tenants but they cannot take out the risks involved. This is addressed in Should I be a Landlord? There will always be risk in owning rental properties. Things happen. Bad tenants happen. Property damage happens. natural disasters happen. As property managers we work to decrease many of the risks, but we cannot promise they will never happen. You have to be able to deal with the risks that come along with owning rentals.
Do you have the time to manage your properties? We take care of the day-to-day needs allowing you to use your time in other ways. We have several successful systems in place that allow us to manage a multitude of properties seamlessly.
Are you a control freak? We see this a lot with landlords that have been in the business for years and have been managing their own properties. They want us to do everything their way, but that won’t work for us. Our systems work and to try to manage different properties using different systems or procedures would be hectic and take way too much time. When landlords decide to work with us, they need to take that leap of faith and allow us to manage them our way using our systems. If this is something you can not let go of, you may be better offer hiring an employee to help you with the day-to-day work instead of hiring a property manager.
Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!
Statement discrepancies happen. There are a lot of moving parts when it come to property management, and property managers throughout the Cleveland, Ohio area are working with a very diverse group of tenants and properties.
Although it may seem easy enough to add up how much you should be getting in rent and subtract the expenses; there is more to it than that. Rent doesn’t always come in at the start of the month; tenants pay late or make arrangements with partial payments. While some expenses are known at the start of the month, they can also come up throughout the month. These two factors will alter the amount you may think you should be getting.
Especially for owners that are out of town, making reference to past statements can easily get confusing. We have worked to eliminate any possible confusion. We do this by first making sure everyone is looking at the same statement. Sometimes amended statements are sent out when things change, and the problem may be that the property owner is looking at an outdated statement without realizing it.
There are two things we do to get rid of confusion. First, we will email the current statement while on the phone before trying to sort out the problem. Making sure both the property manager and the property owner are looking at the same statement is essential.
Another option we have is doing a screen share through join.me. This allows us to send you a link with a code that will allow you to see our computer screen. Then we can walk you through the statement and answer any questions while showing you were the answers are coming from on the statement.
We firmly believe that communication is the key. The better communication we have the less chance there will be for misunderstandings.
If you have rental property in the Cleveland Ohio area, please give us a call. Our experienced investment property management team can relieve you of the burden of managing your rental property while saving you some serious money! Call us today at (440) 220-7300 to see how we can help you!
This is a reality that a lot of us don’t ever want to face. The possibility that someone may hurt us whether through abuse or threats. Realty Trust Services does not condone abuse or threats of any sort between tenants, landlords and tenants, or outside persons. WE TAKE YOUR SAFETY SERIOUSLY. Here are some steps that you can take to protect yourself.
The state of Ohio has a lot of laws that define what abuse is. They can be found online here:
Ohio Laws and Rules
The first thing that you want to do if you are getting abused is get yourself out of the situation. IMMEDIATELY contact your local police department. You have the right to be protected. There are also several different places where you can find further assistance. The National Domestic Violence Hotline is available 24 hours a day, 7 days a week. You can contact them here:
Realty Trust Services wants to make certain each of our tenants feel safe and secure at their home. It is of paramount importance that after a long day of work or taking care of the kids that you come home to a safe and secure place. YOU ARE IMPORTANT TO US.
There are a lot of laws that cover you in the case of something happening. Here are some links to help you:
There are many tools and places that you can contact in the case of domestic violence, abuse, or threats. Realty Trust Services is committed to having a safe living environment for each of it’s tenants.
When you first got into real estate investment it may not have occurred to you that it wasn’t always going to be passive or that you would have to be a collector. Real people require real attention and too often they want to make their problems, your problems. Collecting on your investment can be difficult and at times emotionally taxing. Part of what we do here at Realty Trust Services is take care of the following:
1.) Do the collections
2.) Making the phone calls
3.) Making the 3 Day Notices
We take away the emotions of it while also providing the technical and legal expertise needed. We remove the time consuming, form filing, and give you peace of mind.
Talk to us. We are available to answer your questions about being a collector and what we can do for you. Give us a call at 440-227-7300. You’ll be glad you did.